Security Plan Life Insurance Company, a wholly owned subsidiary Citizens (CIA), has reached a definitive agreement to acquire Magnolia Guaranty Life Insurance Company of Ridgeland, Mississippi, in a transaction valued at nearly $5.23m.

Magnolia Guaranty, which owns 409,553 shares of capital stock outstanding, is specialized in the sale of final expense and pre-need life insurance policies in Mississippi.

As at 31 December 2012, Magnolia Guaranty had assets of $8m and annual premiums of approximately $2.14m.

Pending receipt of concerned regulatory agencies and after completion of requisite due diligence, the transaction is expected to complete in the fourth quarter of 2013, following approval by Magnolia Guaranty’s shareholders.

Commenting on the acquisition, Citizens president Rick Riley said, "As we continue to grow the final expense and pre-need business, Magnolia Guaranty provides a natural synergy with our Security Plan Life Insurance Company subsidiary.

"These two companies complement one another very well, and together, serve to strengthen each other in the Mississippi marketplace."

Citizens operates as a financial services company and aims to expand business by marketing US Dollar-denominated whole life cash value insurance policies globally, selling life insurance products and purchasing other life insurance firms in the country.